Posts Tagged: "Yahoo v. Facebook"

With the advent and rise of the Internet, digital property rights have become an increasingly hot-topic in the Board rooms and Executive Offices of major companies, particularly those in the hi-tech industry. Much like the information protected under intellectual property rights, digital products provide their creators with certain protections under the law. The problems and legal challenges facing major companies like Yahoo and Facebook will help better define the laws surrounding digital property rights, and likely present opportunities as well as a whole host of new legal questions.

But how exactly do patents do all of these wonderful things for companies? Unlike trademarks and copyrights, patents are incredibly difficult to acquire. But a patent, once acquired, grants the holder a fairly long monopoly over their creation. No other individual or corporation can use the patent holder’s creation without negotiating a license (or some other arrangement). Thus, patent holders have a huge advantage over the competition via exclusive use or a profit from licensing. Because, the technology companies heavily market new and cutting-edge products, there is a constant need to acquire new patents to stay ahead of competitors.

The meat of the litigation revolves around patents. For decades patents have been a significant part of intellectual property law, but in recent years they have proven problematic in the development of new software and the technological innovations. Patents will now be at the heart of a cold war between two of the biggest tech companies in the world. Yahoo, which owns about 1,000 patents, is suing Facebook over 10 patent infringements ranging from Internet advertising methods and privacy controls. One of the patents is described as “optimum placement of advertisements on a webpage.” Yahoo had warned Facebook that they would sue if the social network did not agree to license the patents in question, saying that multiple other major companies had complied. Yahoo was true to their word, and called Facebook’s bluff.